What is the story behind the UK small-cap rally?

Stacey Ash, investment manager at iFunds Asset Management, analyses the sectors which have seen a turnaround in fortunes in recent months

Investor appetite for UK small caps has strengthened markedly in recent weeks after a period in which the asset class was firmly out of favour. UK small caps have have risen from the bottom of our league table of 34 asset classes only nine weeks ago, to enter the top ten in our rankings, which are based on analysis of price momentum reflecting investor demand. FTSE 250 stocks have also risen strongly up the table, but the FTSE 100 has not enjoyed a similar upward trend. This indicates investors have greater confidence in the domestic economy, where many small and mid-caps have their prim...